As we speculated more than four years ago, GameStop may be on its way out as more gamers are buying online rather than from brick-and-mortar shops.

On Tuesday, the country’s largest video game retailer cut its fiscal fourth quarter 2012 sales estimates to between 4 and 7 percent down rather than a slight increase. As of this writing, GameStop's stock has taken a near 7 percent hit in one day, falling to $23.12 per share. GameStop’s sales during the nine-week holiday period ending December 29, 2012 fell by 4.6 percent when compared to the same period in 2011.

"Like many retailers, we were disappointed in traffic at holiday," Chief Executive Paul Raines told Reuters in a telephone interview.

GameStop also noted this dip in sales in its most recent 10-K annual report filed with the Securities and Exchange Commission.

“In addition, video game products and content are increasingly being digitally distributed and new competitors are entering the marketplace such as OnLive and Gaikai which are built to take advantage of these new capabilities, and other methods may emerge in the future,” the company said early last year. “We also compete with other sellers of used video game products and other PC software distribution companies, including Steam.”

Analysts also noted that the company saw a 16 percent drop in used-game sales, which has traditionally been a solid moneymaker for the company. Still, if Microsoft's rumored XBox follow-up does appear in 2013, GameStop may be able to shore up its financials. Then again, rumored plans by Microsoft and Sony to potentially block used game sales on their next systems would put a huge dent in GameStop's profits, which are largely dependent on selling pre-owned games at a huge markup.

“We have been waiting for pullbacks in GameStop as great entry points on a controversial name,” Tony Wible, an analyst at Janney Montgomery Scott LLC, wrote in an investor note as quoted by Bloomberg. “Digital receipts were up over 40 percent and iDevice sales continue to see momentum.”

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This has been a long time coming. This comic is 5 years old and has been growing even more accurate as time goes on:

The last time I visited a Gamestop was in 2004, and that was right before I started buying lots and lots of games. Turns out that I wasn't miserly, I just hated the service and selection at game stores.

This has been a long time coming. This comic is 6 years old and has been growing even more accurate as time goes on:

The last time I visited a Gamestop was in 2004, and that was right before I started buying lots and lots of games. Turns out that I wasn't miserly, I just hated the service and selection at game stores.

The writing has been on the wall for a while. Too many games for $10 to free on the most popular gaming devices--Android and iOS. The old model of boxed $60 console games or $40 handheld games has to change; not just for GameStop, but for Microsoft, Nintendo, and Sony if they all intend to keep the traditional gaming market alive.

The writing has been on the wall for a while. Too many games for $10 to free on the most popular gaming devices--Android and iOS. The old model of boxed $60 console games or $40 handheld games has to change; not just for GameStop, but for Microsoft, Nintendo, and Sony if they all intend to keep the traditional gaming market alive.

I'm not sure I agree. Those $60 dollar games are still wildly popular and people still crave that kind of depth and development. The casual gaming market has certainly changed the landscape, but you can't charge $1.99 on a game that costs 40 or 50 million to develop.

I honestly don't mind spending a premium price for a premium product. The great benefit of the web is that the days are gone where I'd be guessing at whether or not my money was wisely spent on these AAA titles.

"Also, Gamestop stores smell," the company added when mentioning possible reasons that holiday sales were down this year. "The local used game stores for some reason are not covered in this grimed stench but we are hoping to counteract this and make Gamestop more comfortable for its shoppers. If we clean up the stores, employ helpful salespeople who actually know what they're talking about, and not give opened, unwrapped games to customers even though they're brand new, we may see a return to profitability."

They've all decided that one person's sale is their sale as well. So when a game gets super cheap on Digital Distribution on one platform, it gets super cheap even on other platforms and disc based games, especially during the holidays.

I saw Borderlands 2 go on sale for $30 several times over the break, through all methods of distribution, Except Gamestop. If I can buy a brand new game for $30, even for Xbox and PS3, why in the world would I pay $55 for a used game at gamestop. The market has shifted downward through strong competition and stores using new game sales as loss-leaders, and gamestop has just refused to play along.

The last time I went to a Gamestop to pick up Mass Effect 3 and get a Kinect for $99 for some promotion, the store manager said that offer didn't exist. Even after I showed him Gamestop's email about it, and the funniest part is seeing the combination getting advertised right behind him on their own tv in store. Yes I told him to watch it, but he just had this 1000 foot stare of a soldier that has seen too much action. Dude didn't budge an inch about it.

This is the reason Gamestop is not going to survive. Customer service is a four letter word to them. They don't even seem to know their own promotions, meh whatever, I'll just next day mail things from Amazon from now on.

I dunno... I don't religiously follow game releases, and browsing the shelves of used games is a good way to discover games I might have otherwise overlooked. I am sure that there is an equivalent online-only way to do so, but looking at physical boxes has always been more pleasant for me.

Or...wait for it... the games this fall weren't very good, so people had less reason to get games this holiday season. And what big games that were out there all have their big sales on opening day.

Hmm, nah I think it's because digital distribution (and online sales) are allowing people to not be bothered to get ripped off anymore. Gamestop's sales practices have been an ever increasing turnoff, and I won't miss seeing them go. I just wish they hadn't bought out most the other decent game stores before kicking the bucket.

"Also, Gamestop stores smell," the company added when mentioning possible reasons that holiday sales were down this year. "The local used game stores for some reason are not covered in this grimed stench but we are hoping to counteract this and make Gamestop more comfortable for its shoppers. If we clean up the stores, employ helpful salespeople who actually know what they're talking about, and not give opened, unwrapped games to customers even though they're brand new, we may see a return to profitability."

We are also looking to find a Unicorn so we may harvest it's meat, organs, blood, and horn for mystic purposes.

"We're losing money because more people are buying online!" (Paraphrase)

Gamestop owns Impulse! Impulse is definitely a player in the digital distribution market (or at least was back when Stardock was in charge). These aren't all lost sales for them, but it is a handy scapegoat.

That said, I (personal opinion) did dislike their stores. I may... sometime, maybe, theoretically purchased something from them at some point. Maybe.

I never could find anything in their stores, which saddened me greatly (they bought out some great games stores in my area).

I dunno... for those of us that don't religiously follow game releases, browsing the shelves of used games is a good way to discover games I might have otherwise overlooked. I am sure that there is an equivalent online-only way to do so, but physicall boxes has always been more pleasant for me.

I could be happy either way. But I end up going to gamestop and buying used games. Occasionally new, but I mostly buy used.

I still buy new Xbox games from Gamestop all the time. And every time I was in there over the holidays it was pretty packed with people, so this report is a surprise to me. Of course it doesn't help that the only new console is a Wii U, the rest have been out for a very long time now so there is not as many people buying consoles.

Also, digital distribution is a ways away before it's really practical enough to take over brick and mortar. The broadband access in the U.S. simply isn't widespread or reliable enough to regularly download games ranging anywhere from 1-10 Gb. It may lay into GameStops profits for a while, but it won't completely overtake them for sometime.

Well, the digital delivery mechanism has been improving steadily and growing nearly exponentially for several years. Bloomberg just published a story today about DVD sales leading the DECLINE in home entertainment purchases, because people stream everything now.

As for gaming, it's not just downloads leading to some of Game Stop's woes, there are the new games available as apps only. That's reached a whole new segment of the population that opts for "light gaming", like Angry Birds, versus "Black Ops". How a company gets too comfortable with an aging model is beyond me, but the publishing industry should have been a smelly enough caracas to provide a clue.

Or maybe not. Obviously not. I wonder if anybody at the top is feeling that "Call of Duty" now? LOL!

It doesn't seem like PC games were ever a really big part of their catalog, though.

My thoughts exactly. When they started relegating PC games to a tiny corner, I had figured that they had all but written PC games off. Even so, consoles are also starting to see digital distribution, but nowhere near the level of Steam and its contemporaries.

The writing has been on the wall for a while. Too many games for $10 to free on the most popular gaming devices--Android and iOS. The old model of boxed $60 console games or $40 handheld games has to change; not just for GameStop, but for Microsoft, Nintendo, and Sony if they all intend to keep the traditional gaming market alive.

This old model is what has kept games so cheap. Thinking this way will bring about game companies who believe their games are worth more than the $60 model we know. Kotick has stated in the past that he would certainly raise game prices if it weren't due to this model (http://www.destructoid.com%2Fkotick-i-w ... 7rHsf-C_Hg)

So games would certainly not get cheaper if this model weren't in place. Having a game as a download option doesn't necessarily mean it will always be cheaper either, because I have seen games on Xbox 360 that cost as much if not more than they do in their physical presence in most retail outlets such as GameStop and Walmart. Physical games are not dead yet, and as long as distributors like Amazon exist, the fight for selling games in this model should continue to exist, even as we transition into a wholly digitally distributed market.

I'm no huge fan of Gamestop, but they still fill a void for me with "games I can't get via digital distribution and don't want to wait in the mail for" on the console side. Mostly, those're Japanese IPs that don't sell that hot.

I don't like this gray area, because I'd love to see more niche titles go the NIS route and become available on PSN or whatever, so I don't have to worry about zero copies making it to my area and I can get it beamed to me Like Now (tm) when I realize I want the game a year after its release. The guys who do console localizations deserve my money a lot more than Gamestop, I just wish digital were always an option.

Hey, something from school is actually coming back to me: Blockbuster is to Netflix, as GameStop is to ?*

I recently came across 2 awesome locally owned non-chain game stores in my area (Philadelphia area) and I prefer to shop there as opposed to GameStop. Those kinds of stores will still have retro gaming (NES, SNES, PSX, etc) going for them when most of the newer games go digital.

I dunno... I don't religiously follow game releases, and browsing the shelves of used games is a good way to discover games I might have otherwise overlooked. I am sure that there is an equivalent online-only way to do so, but looking at physical boxes has always been more pleasant for me.

The problem at Gamestop is half of the physical boxes have the shipped game label removed for some hoakey Gamestop label with a half baked description of the game on it.

Only visited a GameStop once last year to pick up Xenoblade Chronicles. The pre-order push, magazine push, and lazy staff solidified my resolve to continue to not darken their doorsteps again after this purchase. However, I did recently step foot in a GameStop to let my kids play the demo kiosks while my wife shopped just after Christmas. At least they're still relevant for this purpose. As far as the used games go, they seem to have increased their prices for used titles by $5 to compensate for the lack of traffic in the store. Great business decision there GameStop!

I dunno... I don't religiously follow game releases, and browsing the shelves of used games is a good way to discover games I might have otherwise overlooked. I am sure that there is an equivalent online-only way to do so, but looking at physical boxes has always been more pleasant for me.

The problem at Gamestop is half of the physical boxes have the shipped game label removed for some hoakey Gamestop label with a half baked description of the game on it.

Those are the glut of stolen RedBox rentals. Apparently GameStop has two uses in this Universe after all.

Well, the digital delivery mechanism has been improving steadily and growing nearly exponentially for several years. Bloomberg just published a story today about DVD sales leading the DECLINE in home entertainment purchases, because people stream everything now.

As for gaming, it's not just downloads leading to some of Game Stop's woes, there are the new games available as apps only. That's reached a whole new segment of the population that opts for "light gaming", like Angry Birds, versus "Black Ops". How a company gets too comfortable with an aging model is beyond me, but the publishing industry should have been a smelly enough caracas to provide a clue.

Or maybe not. Obviously not. I wonder if anybody at the top is feeling that "Call of Duty" now? LOL!

It doesn't hurt that Amazon sells a whole lot of of blu-rays for under $20 either (with a majority of DVD replacing blu-rays under $10)

...The old model of boxed $60 console games or $40 handheld games has to change; not just for GameStop, but for Microsoft, Nintendo, and Sony if they all intend to keep the traditional gaming market alive.

$60!? FF XIII-3 is listed on Amazon for $70. I think that's where prices are headed.

I dunno... I don't religiously follow game releases, and browsing the shelves of used games is a good way to discover games I might have otherwise overlooked. I am sure that there is an equivalent online-only way to do so, but looking at physical boxes has always been more pleasant for me.

The problem at Gamestop is half of the physical boxes have the shipped game label removed for some hoakey Gamestop label with a half baked description of the game on it.

Those are the glut of stolen RedBox rentals. Apparently GameStop has two uses in this Universe after all.

I haven't been to a GameStop in 2-3 years, so they certainly weren't "stolen RedBox rentals."

...The old model of boxed $60 console games or $40 handheld games has to change; not just for GameStop, but for Microsoft, Nintendo, and Sony if they all intend to keep the traditional gaming market alive.

$60!? FF XIII-3 is listed on Amazon for $70. I think that's where prices are headed.

I bought at least 30 new games last year, I bought exactly 0 at Gamestop. Every single time I go to their stores (in any location) I am overwhelmed by what a consumer-hostile experience it is, by how miserable all the employees seem, and by the knowledge that I could just:1) Buy with two day free shipping (or pre-order with RELEASE DAY delivery) on Amazon. And NEVER have to discuss "disc protection" with some poor college kid who fell into one of the worst retail jobs ever. Or decline to pre-order stuff or get a subscription to $whatever. Or worry that I was just handed an already-opened box in "like new" condition for my $60. Gamestop has forced their employees into their high-margin profit making scheme and by doing so made both their employees and customers miserable.2) Just buy the game on Steam, XBL, PSN, or whatever.

It hurts tremendously for them that several of my favorite games this year weren't even available in their store -- stuff like FTL/Hotline Miami/Jetpack Joyride where I've sunk incredible amounts of time is not and never will be sold as a disc.

If Gamestop wishes to continue existing they need to pivot hard. They need to become a good comics shop, a place where there are events (that aren't asinine "stand in line" midnight launches), where people go to talk about games and talk with real gamers and have a good time. There needs to be a desire to be at Gamestop because it's a fun place to be.